Bank Marketing Strategies in 2023: Building Consumer Loyalty in Difficult Times
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The state of bank marketing today
Digital transformation remains critical
The most pressing challenge for bank marketers heading into 2023 is the need to keep pace with the ever-changing digital landscape. Consumers expect a digital-first experience, coupled with speed and convenience. As more and more people move away from traditional banking products and services, banks will need to find new ways to stay relevant and top-of-mind.
Banking consolidation shows signs of slowing in 2022, and marketers are tasked with educating the market on new combined brands
The need to improve efficiencies and become more competitive spurred a wave of consolidation that showed the first signs of slowing down in the first half of 2022, with a consolidation rate of 2.8%, compared to 3.6% for the last four quarters. The bank merger rate dropped from 3.7% to 3.0% over the same period.
Bank marketers who have recently completed a merger or acquisition are focussed on marketing the transition to customers and employees, and re-building their combined brands and products.
Banks are adapting to lower consumer spending and increased competition
In a time of economic stress, consumers are changing where their dollars are stored and invested. Banks are adapting to meet their changing needs. A study from J.D. Power reported that approximately 27% of retail banking customers are shifting money away from their primary bank to another institution. Customers are citing reasons such as lower fees or rewards and higher interest rates for the move.
According to a recent Quantum metrics survey, three out of five people are seeking out multiple financial institutions to bank with, primarily because they prefer to diversify where their money is kept and are opting for banks with different services, interest rates and opportunities to build their wealth.
Bank marketing strategies in 2023
Building top-of-funnel health
Strong awareness and mindshare in a market differentiates banks from their competitors at a time when consumers are considering changing where their dollars are stored and invested due to economic downturn. In a world where banks are competing for customers on multiple fronts, the importance of having a strong brand cannot be overstated. Top-of-funnel health can be measured by your bank’s awareness and market share within the industry.
Consumer behaviors and expectations have changed with the introduction of new technology. A key piece to retaining and attracting customers while going through your own digital transformation is to align your audience with your brand story. By educating consumers one why your bank is the best option for their needs, you will create loyal customers that will continue to advocate on your behalf, and won’t be easily swayed over to a different institution with new offerings.
Another reason to prioritize top of funnel is to solidify your place in your customers’ minds in preparation for or following a rebrand or new digital product launch. Rebranding following M&A isn’t as easy as a simple logo change–The public has to be continually educated about and reminded of the new and combined brand story in order to build back the trust they had in their original institution.
Legacy banking brands who have launched or are planning to launch a digital service sub-brand or product should also prioritize top of funnel health in 2023. It’s important that these new brands don’t cannibalize the original brand, but rather complement it. Having a strong focus on brand strategy and building brand loyalty with current customers now will prepare your company for changing times ahead. Educating the market on new products and sub-brands will be much more streamlined with a strong brand foundation built.
Focusing on customer retention and loyalty
In 2022, the State of the Connected Customer survey reported that 66% of customers expect companies to understands their unique needs. Customers are demanding more empathy and attention than ever. Pair this with an extremely competitive market, and bank marketers have a loyalty challenge on their hands. Though the challenge seems daunting, it’s still more efficient to retain and grow existing customers than it is to bring on new ones.
One way to provide value to increase retention and loyalty is to provide content that helps consumers improve their financial health. According to a 2022 study from J.D. Power on retail banking advice, 59% of retail bank customers say they expect their financial institutions to help improve their financial health, yet customers report an overall decrease in satisfaction with guidance provided by retail banks. This coupled with a 70% decrease in advice recalled from customers is a failure on the part of retail banks in 2022 to react to growing consumer concerns over the economy, and an opportunity in 2023.
Banks can create both digital and experiential content to help educate their markets on financial wellbeing. Don’t feel trapped to the standard blog posts or infographic content. Other channels like events and seminars in the community, educational video content, or even direct mail can make your content stand out for consumers.
Double down on customer experiences
In 2023, banks are not only competing on product, but on service and experience. Consumers’ expectations have grown and they are no longer willing to put up with long wait times, unhelpful staff or a lack of transparency.
Banks need to focus on creating a seamless customer experience throughout their in-person and online service, marketing, and support. This means making sure that every touchpoint is consistent and that customers can easily move between channels without having to start their journey from scratch.
Word of mouth as a means to win
According to a study by Ipsos, 78% of people would recommend a brand to friends or family after having a positive experience. Creating advocates should be a key focus for banks. Programs like influencer marketing, customer referral programs, and social media amplification can help turn customers into vocal fans.
When done well, “finfluencer” marketing can be an extremely effective way to reach new audiences and position your bank as a thought leader in the industry. But it’s important to partner with influencers who are relevant to your target market and who align with your brand. Challenger banks like Current have proved that influencer marketing is a key strategy to reach younger generations and build emotional resonance.
Aligning your brand with the community
Today’s consumers want to support brands that align with their values. According to Havas Media Group’s 2021 Meaningful Brands report, 77% of consumers expect brands to support them and 64% of consumers prefer to buy from companies with a reputation for purpose as well as profit.
One way to build your bank’s brand reputation amongst your target audience is by getting involved in the local communities you serve. There are many opportunities to engage meaningfully in communities, like sponsoring local organizations such as youth sports leagues, main streets organizations, non-profits, and charities. Your brand can also get involved in local events like school plays, fundraisers, 5ks, farmer’s markets, or town festivals. These kinds of sponsorships help to create a sense of pride and ownership in the community.
Brands that are meaningfully involved in communities will have a lasting and positive impression in consumers’ minds. Local marketing tactics have been proven to build top of funnel health for banking brands, and connect with customers on a more personal level.
Looking forward to 2023
In 2023, banks should focus on building consumer awareness and loyalty by strengthening their top of funnel health, aligning their brand with the community, and experimenting with content and channels that will build strong brand affinity and trust. Banks that adapt to changing times with new strategies will lay the groundwork for long-term success.
Want to learn more about connecting with your local community? LeagueSide is the #1 youth sports sponsorship platform, connecting banks and financial brands with families in the happiest moments of their weeks through youth sports sponsorships. Learn more.
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